@Risk

Walmart suppliers in China aren’t meeting the company’s most basic ethical workforce standards, according to a new report from China Labor Watch (CLW).

The report, titled “Walmart Standards Fail, Workers Suffer,” focuses on five suppliers that manufacture goods such as decorations, shoes, tool, paper boxes, and curtains.  CLW investigated these suppliers by conducting external interviews with workers. The group found out that workers in these factories typically endure:

• Long overtime hours and unreasonable performance expectations in peak production seasons. ( For instance, China’s legal overtime limit is 36 hours, but total overtime at these factories ranged from 100-140 hours/month.)

• Problems with contracts, particularly with regard to training, quitting, and excessive fines for absenteeism.

• Discrimination in recruitment and hiring.

• Audit falsification. Apparently, factory management routinely reports false information and asks workers to lie during audits.

According to CLW, Walmart already has pledged to “remediate” these five factories. But, of course, the company has tens of thousands of suppliers in China, and as the report states, “one-at-a-time improvement is inadequate.”

In fact, CLW met with Walmart’s Ethical Standards team in New York this fall and asked the company to address four specific concerns about the company’s supply chain:

• Pricing is too low, forcing factories to sell goods at prices that are not sustainable.

• Audits systematically fail to identify all labor violations.

• Corporate structure needs to focus on real change and not on image.

• Ethical sourcing efforts need more transparency.

In the report, CLW does say that labor conditions in China have “somewhat improved” in recent years.  However it’s clear that Walmart –and others –need to do more . . . much more.

After all, offshoring and outsourcing are now standard fare on the global corporate agenda, and that means companies  are in a unique position to change the status quo in China and in other emerging economies. By improving standards in their supply chains and engaging policymakers and other key stakeholders, corporations can help create safe, rights-based conditions for workers –conditions that, ultimately, are mutually beneficial to both workers and the businesses that hire them.